Gross margin is defined as gross profit before depreciation and amortization. Gross margin is a measure that does not have a meaning prescribed under IFRS in Canada and accordingly, may not be comparable to similar measures used by other companies.

(2)

Adjusted EBITDA is defined as income before interest, taxes, depreciation, amortization and impairments, gains or losses on foreign exchange, gains or losses on sales of capital assets, bad debt provisions and stock-based compensation. Adjusted EBITDA and Adjusted EBITDA per share are presented because they are frequently used by securities analysts and others for evaluating companies and their ability to service debt. Adjusted EBITDA is a measure that does not have any standardized meaning prescribed under IFRS in Canada and accordingly, may not be comparable to similar measures used by other companies. The Company is consistent with its calculation of Adjusted EBITDA year-over-year.

(3)

Includes capital lease obligations and long-term debt, including current portions.

2014 First Quarter Highlights:

Tesla generated $16.3 million of gross margin, $10.1 million of Adjusted EBITDA and net income of $3.1 million on $61.5 million of revenues during the first quarter of 2014. Improvements for Tesla USA were more than offset by declines for Tesla Canada, Tesla International and Tesla Offshore.

Tesla Canada peaked at eight crews and operated over 90,000 channels during the seasonally strong first quarter of 2014 mainly in the Oilsands, Horn River and Heavy Oil regions of western Canada. Canadian operations utilized its 13,000 stations (39,000 channels) of cable three- component ("3C") recording equipment and up to 18,000 field station units ("FSUs") (54,000 channels) of a wireless multi-component acquisition system ("Hawk"), including 12,000 Hawk FSUs (36,000 channels) owned by the Company.

To meet growing demand for wireless capabilities, Tesla Canada continued to expand the Company's wireless multi-component acquisition system base with the purchase of 6,000 multi- component geophones and 6,000 Hawk FSUs (18,000 channels) in January for utilization during the recent winter. The Company now owns 22,100 Hawk FSUs (66,300 channels).

Tesla USA continued work under an extended seismic services agreement with a multi-client geophysical company utilizing 10,000 Hawk FSUs (30,000 channels) for most of the first quarter of 2014. Existing work commitments extend through June 2014.

Tesla USA kept a smaller second crew utilized during the first quarter of 2014.

Tesla Offshore's Bluefin Autonomous Underwater Vehicle ("AUV") was delivered and field tested early in 2014 and successfully completed its first project in the Gulf of Mexico during late February 2014. Subsequent technical issues are expected to keep the AUV out of service until the end of May 2014 when it is forecast the AUV will return to work on a significant backlog of project commitments.

Tesla Offshore experienced a challenging quarter in both the geophysical and construction divisions with reduced levels of activity, poor weather and delays in getting the AUV fully operational.

Tesla International operated a crew in the UK on a large three-dimensional ("3D") nodal program during the first quarter of 2014 and has developed a significant backlog of 3D programs for the remainder of 2014.

Tesla International began operations on the first of two contracted land projects in Kenya late in the first quarter of 2014 following an extended mobilization into the country. Management is pursuing other opportunities in the region and expects to be operational in Kenya for most of 2014.

Tesla International recently finished mobilization on a marine program in the Democratic Republic of the Congo ("DRC"). Operations began in late-April and will remain active into the third quarter of 2014.

Tesla International settled its Somaliland contract termination claim during the first quarter of 2014 resulting in the recognition of additional revenues in the quarter.

First Quarter Financial Results:

The Company's consolidated revenues including reimbursables decreased 7% in the first quarter of 2014 compared to the first quarter of 2013. The Company's revenue excluding reimbursables also decreased 7%. Improvements in activity levels for Tesla USA were more than offset by declines in activity levels for Tesla Canada, Tesla International and Tesla Offshore. The Company's gross margin declined in the first quarter of 2014 compared to the first quarter of 2013 due to the reduction in revenues and a decline in gross margin percentage. Gross margin as a percentage of total revenue (including reimbursables) decreased to 27% in the first quarter of 2014 from 38% in the first quarter of 2013 due to the challenges faced by Tesla International and Tesla Offshore during the current quarter. Gross margin as a percentage of revenue excluding reimbursables declined to 33% in the first quarter of 2014 compared to 47% in the first quarter of 2013 for similar reasons. Reimbursable revenues declined slightly as a decrease in front- end work undertaken by Tesla Canada was partially offset by the increased activity and front-end work undertaken by Tesla USA and to a lesser extent increased reimbursables for Tesla International.

Tesla Canada's total revenues declined due to drops in both acquisition and reimbursable revenues. Despite lower levels of activity across the industry, Tesla Canada benefited from its long-term customer relationships and efficiencies from new technology and crew performance to secure a significant portion of the available work. Tesla Canada operated an average of over six crews during the first quarter of 2014, peaking at eight crews in early March. Tesla Canada also operated up to eight crews during the first quarter of 2013. Revenues were negatively impacted by a drop in activity days, reductions in rates and a heavier weighting of two-dimensional ("2D") projects. This was partially offset by strong utilization of 3C equipment, including a heavy weighting of Hawk multi-component wireless equipment which derives higher revenues than conventional single-component cable equipment. Tesla Canada's gross margin declined with the drop in operating revenues.

Despite a soft US seismic land acquisition market, Tesla USA saw an increase in revenues driven mainly by increased activity levels and, to a lesser extent, an increase in front-end related reimbursables. Activity levels improved significantly with two Hawk crews operating throughout most of the quarter on large 3D programs. Operations in the US were limited during the first quarter of 2013 with the initial Hawk system in Canada until early March when Tesla USA returned to work under its agreement with a multi-client geophysical company. Tesla USA's gross margin increased with the improvement in operating revenues and benefitted from the utilization of additional Hawk equipment purchased in June 2013.

Tesla International's revenues declined from the comparative quarter. During the first quarter of 2014, revenues were generated from a large 3D nodal project in the UK, mobilization revenues for two projects in Africa, operational revenues in Kenya and the settlement of the Somaliland contract termination claim. During the first quarter of 2013, Tesla International completed projects in Tanzania and the DRC and began mobilization into Somaliland for a contract in the country. Tesla International also completed projects in Europe and the UK. Current quarter gross margins decreased due to cost overruns incurred in Kenya despite the benefits of the Somaliland settlement and a successful project in the UK.

Tesla Offshore's revenue declined significantly during the first quarter of 2014 compared to the first quarter of 2013. There were industry-wide declines in both geophysical and construction activity quarter over quarter. Further, Tesla Offshore was unable to generate significant revenues from its AUV following its delivery during the quarter due to ongoing technical issues. Management is working with the AUV supplier to rectify the issues. Tesla Offshore's gross margin was negative due to the reduced operating revenues, poor weather and significant costs incurred to address the AUV's technical issues.

The Company's Adjusted EBITDA decreased in the first quarter of 2014 compared to the first quarter of 2013. The decline was due to a decrease in absolute gross margin for reasons noted above. General and administrative costs remained fairly consistent quarter over quarter. The Company's consolidated net income also decreased in the first quarter of 2014 compared to the first quarter of 2013 due to a decline in Adjusted EBITDA and increased depreciation related to the Company's recent Hawk and AUV purchases. This was partially offset by a corresponding reduction in income tax expense.

The Company's working capital decreased $6.9 million during the quarter to $5.0 million including a net cash deficit of $9.7 million. Operating cash flows, operating lines and a $3.0 million draw on long-term debt were used to repay $1.3 million of regular finance leases and fund $16.0 million of capital expenditures during the quarter including 6,000 Hawk FSUs and Tesla Offshore's AUV.

Total long-term borrowings increased by $2.4 million during the quarter to $34.0 million. Draws on long- term debt of $3.0 million and the weakening of the Canadian dollar against US dollar denominated long- term borrowings were partially offset by regular payments made on outstanding finance leases.

Shareholders' equity increased $5.3 million to $70.5 million during the quarter due to the earnings generated during the quarter, an increase in accumulated other comprehensive income due to the weakening of the Canadian dollar against the functional currency of the Company's foreign subsidiaries along with an increase in contributed surplus relating to share-based payment charges.

Outlook:

Despite challenges in certain regions during the first quarter of 2014, the outlook remains positive throughout the Company. Significant contracts are in place across all segments and backlog remains strong. Tesla continues to look for ways to expand its service offerings and the geographical areas in which it operates.

North America Land Operations

Tesla Canada operated three Hawk crews into April, two of which worked on large 3D programs until mid- month as spring break-up hit western Canada. This activity will lead to improved revenues in the second quarter of 2014 compared to the second quarter of 2013. Improvement in natural gas prices may lead to an increase in exploration activity during the summer months. However, at this time, the Company only expects to operate one crew periodically during the remainder of the second and third quarters from potential activity in both western and eastern Canada. There is optimism regarding fall and winter work based upon early bid requests from new clients, First Nations approvals for specific projects and expected recurring work for existing clients. Tesla Canada expects to be able to capitalize on these opportunities utilizing its cable 3C recording equipment along with both owned and rented multi- component Hawk wireless systems.

In the US, a 10,000 FSU Hawk crew continues work on 3D programs under an agreement with a multi- client geophysical company. This crew will be operating in Pennsylvania into June 2014 with additional projects likely to follow in the third quarter of 2014. Tesla USA continues to work on terms for an extension to the existing multi-year agreement. While the strong relationship will be maintained, any arrangement will likely have a reduced commitment moving forward and allow Tesla USA the opportunity to utilize this system to pursue projects with different clients and diversify its revenue stream. A second crew utilizing a 6,000 FSU Hawk system has projects scheduled for the third quarter of 2014 with a number of additional bids outstanding. This system had been relocated to Canada for the conclusion of the winter season. The US seismic market remains soft with heavy competition for available projects. Pricing of services continues to be the driving factor in this competitive market with requirements for higher channel counts, wireless recording systems and third-party multi-client programs driving the demand for services. Activity levels remain focused on oil and liquids rich shale plays such as the Bakken, Utica (eastern Ohio), Marcellus (western Pennsylvania and West Virginia) and Denver-Julesburg ("DJ") Basin.

South and Central America Operations

Tesla continues to pursue opportunities to expand the Company's footprint in South and Central America. Tesla Colombia's office in Bogota continues to provide a base for marketing efforts in the region. Relationships have been built with both oil and gas and mining companies operating in South and Central America. Many of these companies are Canadian-based or international operators that Tesla has done work for in other regions of the world. Management has also focused on developing relationships with local companies that can provide support to Tesla's operations in South and Central America and provide access to potential clients. While no projects have been awarded at this time, the management team has been successful in expanding the number of bid opportunities it has participated in.

International Operations

Tesla International's UK and European crew has seen a sustained demand for acquisition services in both the hydrocarbon and renewables sectors both in the UK and mainland Europe. Despite delays in the current work schedule due to permit challenges, this crew has a backlog of 2D and 3D programs that should see the crew highly utilized throughout 2014. Several of these programs require the use of a single-component nodal system. Rental and purchase options for this system are being reviewed including the use of the Company's inventory of Hawk FSUs which sees the first use of 3C sensors on a large scale 3D project in the region. Management is also pursuing opportunities to expand its European presence.

Tesla International began operations on a 2D project in Kenya in late March with an additional program contracted to follow that will keep this African crew busy late into 2014. Tesla International is pursuing additional projects related to the latest concession awards in Kenya and the associated work commitments in the region in order to extend backlog in the country. Tesla International has also recently completed mobilization and start-up operations on a marine project in the DRC that should keep a second African crew utilized until the end of the second quarter of 2014.

Two key areas of East Africa are experiencing greater levels of activity following political stabilisation and the interest of some of the major operators in developing their activities in the area. The first key area involves interests along the Great Rift Valley Trend from Tanzania into Ethiopia. This interest is in chasing plays based on the recent discoveries in Uganda and successes in Northern Kenya. There remains significant interest in the lake zones of this Rift Valley Trend with Tesla International well placed to exploit the transition zone ("TZ") acquisition opportunities in the area. The second area of increased exploration activity is near coastal blocks from Mozambique northward to Somalia which are hinged on recent major gas discoveries offshore East Africa. Tesla International expects to be successful in obtaining additional work from both these opportunities and from exploiting some potential new areas of activity to extend its current backlog.

Following the termination of a contract in Somaliland due to security concerns, Tesla International engaged with the Somaliland Ministry of Energy and has left a limited asset base in Somaliland pending the creation of the region's Oil Police Support Unit and the outcome of active bids in the region.

The UK technical services office remains steady with a number of in-seam seismic, unconventional gas (coal bed and tight reservoirs), and geophysical interpretation projects and is pursuing additional projects to strengthen backlog.

Offshore Operations

As previously disclosed, a significant focus of Tesla Offshore's commitment to expansion centers on its recent purchase of a Bluefin 21 AUV. The AUV was delivered and began field tests early in 2014 and successfully completed its first project in the Gulf of Mexico during late February. Subsequent to the first project, the AUV encountered a number of technical issues that have kept the AUV from servicing the backlog of projects that management has obtained. Management is working with the AUV supplier to rectify the issues and the AUV is expected to be operational again by the end of May 2014.

In addition to providing this much needed service to our existing customer base, offering AUV services worldwide has opened new markets for Tesla Offshore related to deep water oil and gas field development across the globe and is optimistic regarding significant AUV work in Southeast Asia. Tesla Offshore has hired several experienced personnel to manage and optimize use of state-of-the-art technology in geophysical survey operations, including the AUV service line. This includes the recruitment of one of our longstanding top contractors to manage AUV operations, as well as a seasoned AUV Party Chief with thirteen years of experience performing AUV operations worldwide and the establishment of an alliance with a custom software developer with equal AUV experience and the ability to develop needed applications for handling AUV and other sensor data sets. The company also continues to further the development of geo-hazards interpretation services for local and international clients.

Tesla Offshore's geophysical activities are beginning to ramp up following the seasonal winter slowdown. Tesla Offshore's dedicated geophysical vessel is working on a limited backlog of turnkey work until the AUV returns to operations. Additional opportunities are expected from the Central and Eastern Gulf of Mexico lease sales that took place in March 2014. In mid-April, Tesla Offshore remobilized the first of two geophysical vessels to continue the large scale day-rate exploration projects that were put on hold for the winter months. The second vessel remobilized in early May. Both vessels are expected to work continuously until the end of the third quarter of 2014.

Construction activities remain lower than historical levels driven by a reduction in drilling activity on the shelf of the Gulf of Mexico. Despite a reduced level of trawling and positioning work in the Gulf of Mexico, special project work relating to survey support for removal systems is expected to begin in May, much earlier than in the prior year. While there are a number of opportunities in play, the construction division will see reduced activity levels while the industry remains abnormally slow.

Tesla Offshore continues to pursue opportunities outside the Gulf of Mexico. The multi-year project in Alaska has been placed on standby awaiting word of approved permit clarifications and a return to full operations. As long-term clients continue to expand into international areas, Tesla Offshore continues configuring systems and staff to profitably provide services to support those expansions.

Tesla Offshore has completed development for the provision of 3D seismic interpretation and completed its first project in early May, with a second project well under way at that time. The backlog of awarded prospects for this new service continues to grow. To date, the 3D seismic interpretation projects awarded to Tesla Offshore have been in conjunction with award of AUV utilization to perform the required Archaeological Survey aspect for these project areas. Tesla Offshore continues to pursue alliances and broaden service offerings such as geotechnical acquisition and multi-streamer along with high-resolution shallow seismic services to further expand the Company's opportunities.

On October 30, 2013, the Company received notice that a complaint had been filed under maritime law against Tesla Offshore and a vessel owner and operator (the "Defendants") by an unrelated third-party (the "Plaintiff") in the United States District Court for the Eastern District of Louisiana (the "Court"). The Plaintiff is seeking in excess of $10 million USD ($11 million) from the Defendants for alleged physical damages and economic losses resulting from an incident involving a time chartered vessel under contract to Tesla Offshore in November 2012. The vessel owner and operator filed its defense against the Plaintiff's claim and brought a cross-claim charge against Tesla Offshore related to the incident. Tesla Offshore has responded to the complaint by denying any and all liability and fault and filing a cross claim against the vessel owner and operator. Tesla Offshore notified its insurance underwriters of the claim and a coverage dispute exists. Tesla Offshore has filed a complaint against its insurer, insurance broker and the vessel owner and operator's insurer for wrongful failure to honor their obligations to defend Tesla Offshore and insure the claim. Tesla Offshore's insurer subsequently informed Tesla Offshore that it would defend Tesla Offshore against this claim subject to a reservation of rights. The Company has engaged its own legal counsel to defend Tesla Offshore against the claims and ensure appropriate coverage by the insurer. The direction and financial consequences, if any, of these claims cannot be determined at this time and, consequently, no provision has been recorded in the Company's consolidated financial statements.

Forward-looking Statements:

Certain information set forth in this press release, including management's assessment of the Company's future plans and operations, contains forward-looking statements, which are based on the Company's current internal expectations, estimates, projections, assumptions and beliefs, which may prove to be incorrect. Some of the forward-looking statements may be identified by words such as "expects", "anticipates", "believes", "projects", "intends", "continues", "estimates", "objective", "ongoing", "may", "will", "should", "might", "plans" and similar expressions. These statements are not guarantees of future performance and undue reliance should not be placed on them. Such forward-looking statements are based on current expectations, estimates and projections that involve a number of known and unknown risks and uncertainties, which may cause the Company's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These include, but are not limited to, the risks outlined in the "Business Risks" section of the Company's MD&A for the three months ended March 31, 2014.

The information contained in this press release should not be considered all-inclusive as it excludes changes that may occur in general economic, political and environmental conditions. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond its control. Investors are cautioned against attributing undue certainty to forward-looking statements. The forward-looking information and statements contained in this press release speak only as of the date hereof and, subject to its obligations under applicable law, the Company does not intend, and does not assume any obligation, to update these forward-looking statements if conditions or opinions should change.

About Tesla

Tesla provides geophysical and related services in Canada through Tesla Exploration Partnership, internationally through its wholly owned subsidiaries Tesla Exploration International Ltd., Tesla Exploration Trinidad Ltd. and Tesla Exploration Colombia S.A.S., and in the United States through Tesla Exploration Inc. and Tesla Offshore LLC. Since the Company's inception in 2000, Tesla has grown both organically and through acquisitions funded by retained earnings and prudent levels of borrowing, from a Canadian focused land seismic business to a global provider of a broad suite of geophysical and related services. Tesla trades on the TSX under the symbol "TXL".